An experimental investigation of insurance decisions in low probability and high loss risk situations


ÖZDEMİR Ö. , Morone A.

JOURNAL OF ECONOMIC INTERACTION AND COORDINATION, vol.9, no.1, pp.53-67, 2014 (Journal Indexed in SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 9 Issue: 1
  • Publication Date: 2014
  • Doi Number: 10.1007/s11403-013-0112-2
  • Title of Journal : JOURNAL OF ECONOMIC INTERACTION AND COORDINATION
  • Page Numbers: pp.53-67

Abstract

This experimental study investigates insurance decisions in low-probability, high-loss risk situations. Results indicate that subjects consider the probability of loss (loss size) when they make buying decisions (paying decisions). Most individuals are risk averse with no specific threshold probability.